Public Act 096-1345
 
SB3747 EnrolledLRB096 18779 AJO 34164 b


  
    AN ACT concerning real property.
  
 
    Be it enacted by the People of the State of Illinois,
 
represented in the General Assembly:
  
 
 
    Section 1. Short title. This Act may be cited as the 
Transfer Fee Covenant Act.
 
    Section 5. Legislative findings. The General Assembly 
finds and declares that the public policy of this State favors 
the marketability of real property and the transferability of 
interests in real property free of title defects or 
unreasonable restraints on alienation. The General Assembly 
further finds and declares that transfer fee covenants violate 
this public policy by impairing the marketability and 
transferability of real property and by constituting an 
unreasonable restraint on alienation regardless of the 
duration of the covenants or the amount of the transfer fees, 
and do not run with the title to the property or bind 
subsequent owners of the property under common law or equitable 
principles.
 
    Section 10. Definitions. As used in this Act:
    "Transfer" means the sale, gift, conveyance, assignment, 
inheritance, or other transfer of an ownership interest in real 
property located in this State.
    "Transfer fee" means a fee or charge required by a transfer 
fee covenant and payable upon the transfer of an interest in 
real property, or payable for the right to make or accept such 
transfer, regardless of whether the fee or charge is a fixed 
amount or is determined as a percentage of the value of the 
property, the purchase price, or other consideration given for 
the transfer. The following are not transfer fees for purposes 
of this Act:
        (1) any consideration payable by the grantee to the 
    grantor for the interest in real property being 
    transferred, including any subsequent additional 
    consideration for the property payable by the grantee based 
    upon any subsequent appreciation, development, or sale of 
    the property. For the purposes of this paragraph (1), an 
    interest in real property may include a separate mineral 
    estate and its appurtenant surface access rights;
        (2) any commission payable to a licensed real estate 
    broker for the transfer of real property under an agreement 
    between the broker and the grantor or the grantee,  
    including any subsequent additional commission for that 
    transfer payable by the grantor or the grantee based upon 
    any subsequent appreciation, development, or sale of the 
    property;
        (3) any interest, charges, fees, or other amounts 
    payable by a borrower to a lender under a loan secured by a 
    mortgage against real property, including but not limited 
    to any fee payable to the lender for consenting to an 
    assumption of the loan or a transfer of the real property 
    subject to the mortgage, any fees or charges payable to the 
    lender for estoppel letters or certificates, and any other 
    consideration allowed by law and payable to the lender in 
    connection with the loan;


        (4) any rent, reimbursement, charge, fee, or other 
    amount payable by a lessee to a lessor under a lease, 
    including but not limited to any fee payable to the lessor 
    for consenting to an assignment, subletting, encumbrance, 
    or transfer of the lease;


        (5) any consideration payable to the holder of an 
    option to purchase an interest in real property or the 
    holder of a right of first refusal or first offer to 
    purchase an interest in real property for waiving, 
    releasing, or not exercising the option or right upon the 
    transfer of the property to another person;


        (6) any tax, fee, charge, assessment, fine, or other 
    amount payable to or imposed by a governmental authority, 
    as long as such tax, fee, charge,  assessment, fine, or 
    other amount payable is not imposed or payable by virtue of 
    a covenant or declaration;
        (7) any fee, charge, assessment, fine, or other amount 
    payable to a homeowners', condominium, cooperative, mobile 
    home, or property owners' association pursuant to a 
    declaration or covenant or law applicable to such 
    association, including, but not limited to, fees or charges 
    payable for estoppel letters or certificates issued by the 
    association or its authorized agent; or


        (8) Any fee, charge, assessment or other amount payable 
    to an entity exempt from taxation under Section 501(c)(3) 
    of the Internal Revenue Code whose purpose includes the 
    conservation of land, natural areas, open space or water 
    areas or the preservation of native plants or animals, 
    biotic communities or geographic formations located within 
    the same subdivision or planned unit development or within 
    one-half mile of the real property to which the transfer 
    fee covenant attaches for the exclusive or non-exclusive 
    use and benefit of the owners of that real property.
    "Transfer fee covenant" means a declaration or covenant 
purporting to affect real property which requires or purports 
to require the payment of a transfer fee to the declarant or 
other person specified in the declaration or covenant or to 
their successors or assigns upon a subsequent transfer of an 
interest in the real property.


 
    Section 15. Transfer fee covenant prohibition. A transfer 
fee covenant recorded in this State on or after the effective 
date of this Act shall not run with the title to real property 
and is not binding on or enforceable at law or in equity 
against any subsequent owner, purchaser, or mortgagee of any 
interest in real property as an equitable servitude or 
otherwise. Any lien purporting to secure the payment of a 
transfer fee under a transfer fee covenant recorded in this 
State on or after the effective date of this Act is void and 
unenforceable. This Section does not mean that a transfer fee 
covenant or lien recorded in this State before the effective 
date of this Act is presumed valid and enforceable.